Glial activation plays an important role in the pathogenesis of various neurodegenerative disorders including Alzheimer's disease. However, molecular mechanisms by which activated glia could kill neurons are poorly understood. The present study underlines the importance of neutral sphingomyelinase (N-SMase) in mediating the damaging effect of fibrillar amyloid-β 1-42 (Aβ_1-42) peptide-activated astroglia on neurons. In transwell experiments, soluble products released from activated primary human astroglia induced the activation of neutral sphingomyelinase (N-SMase), production of ceramide, and cell death in primary human neurons. Protection of neurons from cytotoxic effects of activated astroglia by antisense knockdown of N-SMase, but not acidic sphingomyelinase (A-SMase), suggests that soluble products released from activated astroglia kill neurons via N-SMase but not A-SMase. Next we examined the role of N-SMase in the activation of human astroglia. Interestingly, knockdown of N-SMase, but not A-SMase, by either antisense oligonucleotides or chemical inhibitor, prevented the induction of proinflammatory molecules [tumor necrosis factor-α, inducible nitric oxide synthase, interleukin-1β (IL-1β), and IL-6] and the activation of nuclear factor-κB in Aβ_1-42-activated astroglia. Subsequently, fibrillar Aβ peptides also induced the activation of N-SMase and ceramide in vivo in mouse cortex. Most importantly, antisense knockdown of N-SMase, but not A-SMase, decreased the activation of astroglia and protected neurons from fibrillar Aβ toxicity in vivo in the cortex. Together, it is apparent that both the activation of astroglia by Aβ and that the cytotoxicity of activated astroglia on neurons depend on N-SMase.